PRECIOUS-Gold inches down, Bernanke eyed for stimulus clue

Mon Jul 15, 2013 3:36pm EDT

* Disappointing China growth, U.S. retail data limit losses
    * China, India premiums on physical products stay high
    * CFTC data shows speculative short position at record high

 (New updates throughout, adds comment, details, second byline,
dateline)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, July 15 (Reuters) - Gold eased in quiet
trade on Monday after last week's sharp gain, as investors await
Federal Reserve Chairman Ben Bernanke's testimony before U.S.
Congress later this week for market cues.
    The metal rose overnight after data showed China's economic
growth slowed in the second quarter, and later a report showed
U.S. retail sales rose less than expected in June.
 
    Bullion investors now focus on Bernanke's semi-annual
testimony to Congressional committees this Wednesday and
Thursday, which will be watched for further signs about the
timing and speed of any reduction in bond purchases.
    Gold gained 5 percent last week, its biggest weekly gain in
nearly 2 years, after Bernanke said the U.S. central bank needed
to keep a stimulative monetary policy in place given an
uncertain job market and low inflation.
    "Although prices have responded to concerns over growth, in
our view, a deterioration in U.S. macro data would be required
for prices to make a sustained move higher in light of record
gross short positions," said Suki Cooper, precious metals
strategist at Barclays Capital.     
    Spot gold inched down 49 cents to $1,283.80 an ounce
by 2:59 p.m. EDT (1859 GMT).
    U.S. gold futures for August delivery settled up
$5.90 at $1,283.50 an ounce, with trading volume about 30
percent below its 30-day average, preliminary Reuters data
showed.
    Hedge funds and money managers raised bullish bets in gold
and futures and options for a second straight week, as signs of
tight physical supplies sparked buying, a report by the
Commodity Futures Trading Commission showed on Friday. However,
speculators also boosted their short position to a record high.
 

    ASIAN PHYSICAL PREMIUMS HIGH
    The cost of borrowing gold stayed near its highest level
since January 2009, reflecting dwindling supplies from bullion
banks after heavy liquidation and resilient demand for physical
gold products.
    Trading volumes for gold and silver on the Shanghai Futures
Exchange (ShFE) rose to record volume on Friday, with premiums
in Asian gold products remained at sharply higher levels than in
North America and Europe. 
    "The strength in China and India gold premiums, the recent 
move higher in gold lease rates and central bank gold buying
indicate physical demand for gold may provide some support in
the near term," Deutsche Bank commodities strategists said in a
note. 
    However, investor sentiment remained guarded. Holdings of
the world's largest gold-backed ETF SPDR Gold Trust posted
the biggest weekly loss of 2.6 percent since the end of April
last week. The fund has seen outflows of over 13 million ounces,
or about $17 billion at current prices, so far this year.
    Among other metals, silver gained 0.3 percent to
$19.93 an ounce, having risen nearly 6 percent last week.
    Supply fears due to mine labor issues in South Africa
continue to boost platinum group metals. Platinum rose
1.4 percent to $1,421.24 an ounce, while palladium was up
1.6 percent to $729.50 an ounce.
 2:59 PM EDT     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold AUG   1283.50   5.90   0.5  1272.50 1293.60  106,996
 US Silver SEP  19.839  0.047   0.2   19.540  20.135   23,930
 US Plat OCT   1421.40  14.50   1.0  1407.00 1427.00    5,255
 US Pall SEP    732.15   9.25   1.3   721.45  734.55    2,167
                                                               
 Gold          1283.80  -0.49   0.0  1276.45 1294.46         
 Silver         19.930  0.060   0.3   19.700  20.140
 Platinum      1421.24  19.74   1.4  1406.00 1423.00
 Palladium      729.50  11.50   1.6   724.00  731.25
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        132,979   193,507   179,431     22.93   -0.50
 US Silver       25,823    66,385    56,418     29.42   -1.94
 US Platinum      5,326    16,183    13,073     24.21   -1.95
 US Palladium     2,206     4,418     5,519                  
                                                               
 
 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by Anthony Barker, Jeff Coelho and Nick Zieminski)